Market Update for April 2
Trading activities on the Nigerian Exchange resumed on a negative note, after the two-day holiday to mark the end of the Islamic holy month of Ramadan, which halted the previous gain. Tuesday, whic was the first session of the month April and second quarter of the year, witnessed a selling sentiment as companies announced impressive corporate earnings and higher dividend payouts reflecting selloffs and continued portfolio rebalancing ahead of markdown, Annual General Meetings and 2025 Q1 earnings reports which market players continued to digest the recent audited full year results.
Notwithstanding, the seeming quick market and seesaw movements on the exchange, the values of great companies are being revealed to discerning investors and smart traders, just as macroeconomic data being unveiled points to economic recovery and improvements in private sector activities. For example, the Purchasing Managers’ Index for the month of March just released, inched higher to 54.30 points, from 53.7 points in February, even as the Consumer Price Index for March is expected to hit the market on the April 15. This also, may likely throw more light on the state of the economy, just as Nigeria’s benchmark equity market indicator remained mixed amid global concerns over the impact of trade tariffs policy of the Donal Trump administration in the U.S, since assuming office on January 20.
The NGX All-Share-Index closed lower on a low traded volume and negative market internals, side trending and consolidating to create buy opportunities. However, the market’s pullback will support higher yields for dividend income investors.
However, the ongoing volatility due to global trade warfare will definitely make some economies across the globe and mar some others. It is therefore time for economic managers and government to rethink their fiscal and monetary policies if they are to drive and sustain growth in their domain, even as the recent selloffs are creating opportunities to buy in value and reshuffle portfolios in the mature markets and in our market today.
The distribution phase of the NGX provides opportunity for market players to target dividend, using the qualification and markdown dates to play the market, as pullbacks will impact dividend yields positively as mentioned earlier and provide room for higher upside that support capital gain. This is because the market is still at its oversold region that supports retracement in the midst of sector rotation, consolidation moves in some industries and expectations of positive quarterly numbers in the new month.
Technically, money flow and other momentum tools are mixed, revealing gradual return of strength that present opportunities to buy low and sell high in the midst ongoing volatility and selling sentiment. The index inched lower to signal profit taking, thereby creating the perfect setup for high probability of continuation to catch dividend season repositioning at the right price. Also, the index trades on top of the T-line but below two moving averages of 50-EMA and 50-SMA, this indicates recovery in the midst of changing market fundamentals and technicals on the NGX and the economy.
Investor sentiment, as revealed by candlestick formation and momentum indicators, shows that ADX is looking down to read 20.18points, while RSI and Money Flow Index were mixed at 45.59 and 42.29 points against the previous session’s 47.04 and 37.88 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds coming back to the market on a selling sentiment in some sectors and position taking in others on a daily time frame. Also, trading volume pattern continues to oscillate, suggesting smart money are watching amid players revaluing the market and short-term opportunities, looking at economic events in the face of policy direction of the government that look inconsistent and global economic outlook in the face of trade war uncertainty and geopolitical tension.
To navigate the rest of Q1 and beyond profitably, it is important to run with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday’s trading session “and also get investdata technical toolbox to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent pullbacks. Despite the oscillating volume of transaction witnessed in recent time, it is time to position in undervalued stocks, sectors and the next insider playing opportunity.
Oil prices at midweek dropped to continue its oscillation, as it trades at $72.48 per barrel in the midst of US announcing more tariffs that rattled the market and OPEC supply boost. Even as US-Russia peace talk and ceasefire in Ukraine continue to shake. Trade war uncertainty continues to drive sentiment and global economic activities. The geopolitical tension across many economies remains a concern to the global economy and energy consumption in 2025. This trend may likely continue, while the up and down movement continues to drive volatility.
Midweek’s trading opened slightly in the green, before pulling back at midday and was sustained throughout the session, despite oscillating on buying interest in banking stocks and others, while selloffs and profit taking continued in some companies. This situation pushed the NGX’s index to an intra-day low of 105,531.10bps from its highs of 106,724.80bps, before closing marginally below its opening level at 105,547.20bps.
Market technicals were negative and weak with lower volume when compared to the previous session in the midst of breadth favoring the bears on a selling sentiment as revealed by Investdata’s Sentiments Report showing 8% buy position and 92% sell volume. The total transaction volume index stood at 0.89points, just as energy behind the day’s performance was weak as Money Flow Index inched up to read 42.29pts, from the previous day’s 37.88pts, indicating that funds entered the market, despite closing lower.
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Index and Market Caps
The composite NGX All-Share Index at the end of Tuesday’s trading slipped by 113.43 basis points, closing at 105,547.20bps from 105,641.51bps, representing a 0.11% drop, while market capitalization fell by N59bn, at N66.19tr from the previous day’s N66.25tr, representing a 0.11% value loss.
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The downturn was driven by selloffs and profit taking in the shares of Oando, Livestock, First Holdco, UACN, University Press, Accesscorp, Fidelity Bank and Custodian, among others. This impacted positively on Year-To-Date gain that inched higher to 2.52%, while Market capitalization gain stood at N6.23tr, representing 5.46% increase over its opening level for the year.
Bearish Sector Indices
Sectoral performance indexes were down, save for the NGX Banking that closed higher by 0.07%, while the NGX Insurance led the decliners after losing 2.61%, followed by Energy and Consumer goods with 0.39% and 0.07% respectively. NGX Industrial goods finished flat.
Market breadth was negative as losers outnumbered gainers in the ratio of 32:25, while activities in volume and value were down after investors exchanged 438.09 million shares worth N12.02bn. Volume was driven by trades in Fidelity Bank, Mutual Benefit, NB, GTCO and Zenith Bank.
UPDC REIT and Africa Prudential were the best performing stocks, gaining 10% and 9.96% respectively, closing at N6.05 and N14.33 per share respectively on the back of sentiment and market forces. On the flip side, UACN and University Press lost 10% and 9.95%, closing at N31.95 and N3.89per share, purely on profit taking and selloffs.
Market Outlook
We expect continuation of mixed sentiment, as players digest earnings reports and dividend payout in the midst of bargain hunting, profit taking and portfolio reshuffling, as few earnings are expected to hit the market with dividend announcement. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value.
This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
